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Sensient Q1 Profit Falls On Restructuring Charge; But Boosts Outlook
Posted: April 18, 2013
Sensient Technologies Corp.’s fiscal first quarter profits fell nearly 26% due to a charge related to its restructuring plan which includes relocating its flavors and fragrances group headquarters to Chicago, consolidating several operating facilities throughout Europe and North America, and reducing headcount by more than 200 employees.
Still, the company boosted its 2013 earnings outlook to a range of $2.66 to $2.73 a share, excluding the impact of the restructuring charge. The company’s previous forecast had been a range of $2.64 to $2.72 per share, excluding the restructuring charge.
For the quarter ended March 31, Sensient's net income fell to $21.4 million, or 43 cents a share, from $28.9 million, or 58 cents a share, a year earlier. However, excluding the restructuring costs of 19 cents a share, earnings rose 6.9% to 62 cents a share, a record for the first quarter.
Consolidated revenue of $366 million in the first quarter was unchanged from the prior year. Foreign currency translation did not have a significant impact on either revenue or operating income during the quarter.
By segment, the flavors and fragrances group’s first-quarter revenue rose 1.1% to $217 million from $214.7 million in the comparable period last year.
The company said the relocation of the flavors and fragrances group headquarters to Chicago is on schedule, and the move is expected to be completed before the end of the year. The costs related to the relocation are included in the restructuring costs, which were reported in the results of the corporate and other segment.
Sensient's corporate and other segment, which includes the company’s operations in Asia Pacific and China and the flavor businesses in Central and South America, reported revenue of $36 million, compared to $35 million a year ago.
“I am very pleased with the Company’s performance in the first quarter,” said Kenneth P. Manning, chairman and CEO of Sensient. “We will remain focused on improving profitability, and our restructuring program will enhance this effort. We started to realize some savings from this plan in the first quarter, and we will achieve greater cost savings as the year progresses. I am very optimistic about the company’s future.”